Siebel Systems Reports Financial Results for Second Quarter
Siebel Systems (Nasdaq:
SEBL) announced financial results for the second quarter ended June 30, 2004. The results were consistent with the preliminary financial results presented on July 7, 2004.
Total revenues for the second quarter of 2004 were $301.1 million. Revenues from license fees were $94.8 million. Revenues from professional services, maintenance, and other services were $206.2 million.
Operating income for the second quarter of 2004 was $10.0 million and net income
was $11.8 million or $0.02 per share, excluding this one-time adjustment. The company was able
to achieve operating profits, up approximately 100 percent year over year,
despite the decline in second-quarter 2004 revenues, primarily as a result of previous restructuring
activities.
The company's cash, cash equivalents, and short-term investments were $2.12 billion as of June 30, 2004, reflecting cash generated during the quarter of approximately $58 million. This was offset by the company's $70 million cash outlay for the Eontec acquisition, which resulted in a net decline in cash of $12 million from the end of the prior quarter. Days sales outstanding in accounts receivable was 60 days for the second quarter of 2004.
Highlights for Q2
New Customers: Siebel secured concluded new software licensing agreements with more than 97 customers in the second quarter, including Acxiom Corporation; Alliance Capital Management L.P.; AstraZeneca AS; Becker Underwood, Inc.; Binda Italia Spa; Cattle's Plc; Computacenter (UK) Ltd; Elan Pharmaceuticals, Inc.; FastWeb S.P.A.; McGraw-Hill Companies, Inc.; Monsanto Company; National Library of Medicine; Novell, Inc.; Pfizer Limited; Renault V.I.; The Boeing Company; Toshiba Solutions Corporation; T-Systems Nova GmbH; and Weststar Bank.
New Customer Engagements: Siebel secured new engagements with previous customers including:
- The Centers for Medicare & Medicaid Services (CMS): A division of the U.S. Department of Health and Human Services, CMS is expanding Siebel Healthcare nationwide to deliver a case management system supporting uniform processes for handling all Medicare appeals.
- EDS: The business process service company procured Siebel Systems' full suite of business applications for internal standardization.
- ExxonMobil: The Lubricants & Specialties business selected Siebel Oil and Gas as its customer support tool.
- Gilead Sciences: The biopharmaceutical company chose Siebel Clinical to enhance employee productivity in managing clinical studies and budgets.
- The Hertz Corporation: Hertz selected Siebel Sales Force Automation to automate its field sales organization.
- Virgin Mobile USA: The wireless carrier selected Siebel Communications as part of its IT infrastructure to optimized customer service capabilities.
- XM Satellite Radio: XM will expand its existing deployment of Siebel CRM applications in its Listener Care organization.
New Acquisition: Siebel Systems acquired Eontec, a global provider of retail banking, on April 20, 2004.
In a quarter of leadership transition and [financial] disappointments, Siebel still turned a profit and continues to be a solid leader in the industry.
SAP Reports Financial Results for Second Quarter
SAP (Nasdaq:
SAP) announced financial results for the second quarter ended June 30, 2004. Breaking the current downward trend among enterprise software providers, SAP's numbers were up and its total revenue increased 9%, compared to the same period last year.
Total revenues for the second quarter of 2004 were US $2.2 billion. Revenues from license fees
were US $603 million.
Revenues from professional services, maintenance, and other services were US $1.5 billion.
Operating income was US $475 million, which was an increase of 15% compared to last year. Net income
was US $302 million, or US $0.97 per share, representing an increase of 14% compared to 2003.
The Americas region, specifically the U.S., continued to be the growth driver for SAP in the second quarter. Software revenues in the U.S. increased 63% year-over-year. The Company believes that it continued to significantly outperform its U.S. based peer group in the U.S.
Highlights for Q2
New Customers and Customer Engagements: SAP announced new deals with entities around the globe: Adobe System, Citrix, Massachusetts Mutual Life Insurance and Pepsi Co (US-based companies); Petroflex Industria e Comercia (Brazil); Akzo Nobel (Netherlands); Swarovski (Austria); Thyssen Krupp and Vodafone (Germany), Yves Rocher (France), Mediaset (Italy) and South African Post Office (South Africa); and NEC Micro Systems, Cosmo Oil, Yokohama Rubber (Japan); National Australian Bank (Australia); Hyundai Heavy Industries (Korea); Shanghai Municipal Electric Power (China); and Jet Airways and Tata Motors (India).
New and Enhanced Partnerships:
- SAP and IBM: Expanding on a current alliance, SAP and IBM announced a major retail partnership in May to promote the end-to-end retail offering comprised of SAP and IBM retail solutions and technologies. By leveraging IBM store capabilities and SAP retail business solutions, the partnership is designed to assist retailers to meet rapidly changing consumer demands and global competition .
- SAP and Microsoft: SAP and Microsoft announced an expansion of their long-standing relationship. The two companies detailed a road map for deeper integration between Microsoft .NET and SAP NetWeaver.
New Acquisistion: SAP acquired A2i, Inc., a privately held software company.
In a disappointing quarter for most enterprise software providers, German-based SAP proved the industry is still evolving.
ExxonMobil Selects Siebel Oil and Gas 7.7 for Global Business Processes
Building on previous CRM partnerships, ExxonMobil has selected Siebel Oil and Gas 7.7 as its systems support tool for customer relations activities.
Siebel Oil and Gas 7.7 offers ExxonMobil seamless integration of customer-facing activities with back-office and operational systems. The new solution will enable ExxonMobil to better manage business processes, better evaluate customer data and trends, while also improving overall efficiency.
"Considering the global scope and complexity of our business, we recognized an opportunity to automate and enhance our customer-facing business processes," said John Lyon, Vice President, Global Marketing, ExxonMobil Lubricants & Specialties. "The Siebel Oil and Gas team offered support systems capable of delivering a comprehensive solution that will bring tangible benefits to both ExxonMobil and our customers."
Symphony Services Successfully Completes One Year of Outsourcing Services for Siebel Systems
A few years ago, the outsourcing bug bit Siebel. In early 2003, Siebel Systems entered into a
partnership with Symphony Services, a global outsourcing partner,
to build an offshore test and development center in India's tech capitol, Bangalore. An extension of Siebel's US based operations, Symphony Services helped train and recruit talent in Bangalore to support Siebel's software quality assurance and product development functions overseas. The work done at this center has enabled Siebel to reduce their development costs, improve quality, and accelerate the output of new product features and functions to market.
"We are very pleased with the quality and capabilities of the offshore team that Symphony was able to assemble and train for us," said Herb Hunt, senior vice president, Siebel Global Services and executive sponsor for Siebel's offshore program. "In just one year, this team is assisting us in meeting our quality and product development commitments."
Total Recall
The fastest growing tech center in India, Bangalore is host to over 50 IT companies, 24 of which are American companies. Offering companies significant cost savings and a highly skilled labor force, U.S. companies are benefiting greatly from sending business processes to India.
IT research and development, and back office processes are the most popular functions companies are sending to India. However, some operations that have been outsourced are being recalled. Customer call centers that very recently flourished in Bangalore are now closing shop. Several U.S. companies that moved customer support centers to India are now bringing them back to the states. Why? The mother tongue.
Indians tend to think in their mother tongue, which is reflected in the thick accent American customers hear when they dial customer service. Last year Dell pulled customer support lines from India and moved them back to the US. Customers frequently complained that communication with the Indian customer service reps was not very easy, due to thick accents and long waiting times before an issue reached a senior technician. Lehman Brothers and Capital One also returned customer support centers to the states due to the dissatisfaction with the skills offered in India.
While the native tongue will always dominate, India has established a system to resolve trans-ocean communication discrepancies. Some companies offer training programs to help Indians neutralize their accent as well as learn more about a company's customer base. The goal of the training is to offer a more 'familiar' experience for native English speakers calling the offshore customer support system.
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